Government to introduce legislation to boost construction and speed up planning decisions

The Government plans to introduce a specific piece of legislation next week that will allow the it to use its low interest rates to underwrite construction projects, including housing, according to Osborne, speaking on Andrew Marr's BBC television programme (at 28 minutes). Osborne also supported the "smart" use of green belt designation to release more land for building.

Osborne also announced plans to introduce new legislation to Parliament which would speed up the processing of planning applications.

"In the next couple of weeks we will introduce into Parliament new legislation to speed up the planning decisions and to speed up the processes that mean we can build roads more quickly," said Osborne on the television show.

“I think we can speed up planning – it is absolutely ludicrous that it takes years to get planning decisions in this country," said Osborne. "You can get much faster decisions on the Continent, let alone in countries like China. This country, in the current economic environment, cannot afford to wait years for development.”

Osborne also highlighted a power that exists which allows councils to release green belt land for development, which is then replaced by with other land newly classified as part of the green belt.

"Cambridge has been smart at swapping green belt land," said Osborne. "The powers exist but they are not that widely used. I would like to see more of that."

It is expected that the Bill will set out proposals under which the Government will offer a £10 billion guarantee to housing associations and private-sector developers, according to an Inside Housing report.

The proposals are part of a wider £50bn economic stimulus package by the Treasury. This also comprises the 'UK Guarantees' system, announced in July, which earmarks £40 billion to underwrite infrastructure schemes.

The new proposals follow warnings by the Local Government Association that councils across the country are running out of cash reserves to boost local economies.

Osborne has indicated that the new legislation will be introduced to Parliament within the next few weeks, with an aim of adopting the legislation by the end of September 2012.